The work assesses whether the effect of open trade policies-OTP on growth is dependent on the level of governance quality in the Economic Community of West African States (ECOWAS) countries. We estimate a non-linear growth equation that interacts OTP with governance. Based on the cross-sectional dependence test, we use the Driscoll–Kraay approach and mainly an extended instrumental variables-IV approach (fixed effect + IV approach also controls the endogeneity issue) to control the correlation between units. The basic regressions without interaction terms indicate that good governance itself is essential for growth while economic growth decreases with the level of OTP. The findings from the non-linear growth equation indicate that while the effect of OTP on growth increases as the institutional quality improves, it changes from statistically significant in the negative direction for bad institutional quality to statistically significant in the positive direction for better institutional quality. These findings suggest that ECOWAS countries must improve their institutional quality to increase the positive effect of OTP on growth.

这项工作评估了开放贸易政策-OTP 对增长的影响是否取决于西非国家经济共同体 (ECOWAS) 国家的治理质量水平。我们估计了一个将 OTP 与治理相互作用的非线性增长方程。在横截面相关性检验的基础上，我们使用 Driscoll-Kraay 方法和主要的扩展工具变量-IV 方法（固定效应+IV 方法也控制内生性问题）来控制单元之间的相关性。没有交互项的基本回归表明善治本身对增长至关重要，而经济增长随着 OTP 水平下降。非线性增长方程的结果表明，虽然 OTP 对增长的影响随着制度质量的提高而增加，它从制度质量差的负向统计显着转变为制度质量较好的正向统计显着。这些发现表明，西非经共体国家必须提高其制度质量，以增加 OTP 对增长的积极影响。